Alabama teacher health insurance premiums may see cost rise
By: Health Insurance
Submitted: 2009-10-09 13:09:16 | Word Count: 496
Alabama education leaders say they will consider increasing the amount educators pay for health insurance, an increase that would be the first since the program was established in 1983.
Teachers have paid $2 a month for single-coverage health insurance since 1986, when the premium was lowered from $10. The portion paid by the state is now $752 per employee each month, more than 19 times what it was back then.
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When some state officials have tried to increase the amount paid by teachers over the years, the Alabama Education Association has fought the increases and won. But even Paul Hubbert, executive secretary for AEA, now acknowledges it may be impossible to keep the rates the same. "The condition of the Education Trust Fund has deteriorated over the last two to three years, so we may have to consider going up on the costs," Hubbert said this week.
State education officials warn that by 2011 the costs for health care will increase 32 percent from what they are today, and picking up those costs may mean being unable to fully fund programs such as the Alabama Reading Initiative; the Alabama, Math, Science and Technology Initiative; and the Advanced Placement initiative.
The Public Education Employees' Health Insurance Plan, PEEHIP, is the state's health care plan for active and retired educators. In 1985, employees and retirees paid $10 a month for single coverage, while the state picked up the remaining $60 a month.
In 1986, the amount paid by employees dropped to $2 and has remained the same since. However, the cost the state must pick up for each employee on the program has increased just about every year since, from $60 a month in 1985 to $752 today.
Hubbert said the amount paid by teachers has remained the same in lieu of teacher raises.
"If the state has to pick up an additional $300 on health insurance for teachers vs. giving them $300 raises, it makes more sense to pick up the health care costs because that's a benefit they don't have to pay taxes on," Hubbert said. "There's not a lot of money to be able to do both."
In 2011, state school Superintendent Joe Morton said, the cost for PEEHIP will rise an additional $243 per employee, bringing the total monthly amount to $995 each. About 100,000 retired and active educators are on the plan.
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